Thursday, December 4, 2014

Businesses Are Getting Bigger

For all the talk we hear about small business being the bedrock of our economy, one of the quiet trends in the American economy continues to be the growing size of businesses. The Labor Department reported yesterday that as of the first quarter, businesses with 500 or more employees accounted for 46.3 percent of all U.S. private-sector workers. Ten years ago, that figure was 44.2 percent. Businesses with fewer than 50 employees saw their share of employment slip from 30.2 percent to 28.4 percent over the same time frame.

Labor's figures also show there were 213,000 new businesses created in the first quarter. That's just slightly up from the 207,000 that formed in the first quarter of 2004 - and something of a decline when you consider that there are 6.6 million more workers on private-sector payrolls now.

Economists have long struggled to understand why wages have been growing so slowly lately, by only about 2 percent annually. It could simply be that as U.S. companies are getting bigger, workers have fewer employers to choose from.

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